A New Way for the Middle Kingdom?

Credit: Brookings.edu

Credit: Brookings.edu

China’s environmental laws, while modern and extensive on paper, are often viewed as paper tigers. However, a quiet environmental transformation is overtaking China as provincial leaders throughout the country push to limit pollution.

This has been especially true during the terms of China’s 11th Five-Year Plan (2006-10). Two provinces in China, for example, each constructed over 100 wastewater treatment plants by 2010, a feat made more impressive by the fact that in 2006, one of these provinces only had two such plants. Within this same time period, installation of pollutant reducing scrubbers on China’s coal-generating capacity has gone from 10% to 86%. Nothing has changed in terms of the traditional environmental law framework in China, but dozens of inefficient factories and power plants are being shut down. What is causing all of this?

Professor Alex Wang, the former Director of the China Environmental Law & Governance Project for the Natural Resources Defense Council, believes he understands the answer. After years of research and interviews on the ground in China, he explains the source of this turnaround in his article “The Search for Sustainable Legitimacy: Environmental Law and Bureaucracy In China.” (Listen to Sense & Sustainability’s podcast with the author here.)

According to Prof. Wang, this environmental reform should not be credited to policy or lawmaking, but rather to the system by which provincial leaders are monitored and ranked by the leaders of the Chinese Communist Party (CCP). Many don’t realize that the leadership in Beijing controls its provincial leaders by ranking them on their annual progress according to key metrics. This “cadre system,” as it is called in China, is a bureaucracy management tool that is, at its simplest, a rubric for “grading” lower-level leaders.

Historically, the key “grade-sheets” score highly for economic growth, which in practice relegates environmental considerations to a secondary position; however, starting in the 11th Five-Year Plan, these grade-sheets started to incorporate environmental metrics as well. In particular, they incorporated two sets of metrics around energy-intensity reduction (emissions per $ GDP) and emissions reductions. Points were awarded for creating emissions goals, shutting down old plants, piloting demonstration facilities, creating monitoring programs, and implementing investments per a national target.

Interestingly, because of a problem with accurate data collection in China, the Chinese Central Government cannot rely on emissions and pollution data from the provinces. Readers may recall the famous “gigatonne” gap, where the difference alone in emissions reported by the provinces versus those reported by the central government in 2010 was equivalent to Japan’s entire annual carbon emissions. With this discrepancy in mind, Beijing would have had a tough time regulating emissions and “grading” provinces on how much pollution they emitted; instead, they decided to score provincial governors on other, easier to track metrics that stood as proxies for actual pollution reductions. Focused less on traditional regulation and monitoring, these metrics included accounting for the number of old facilities closed and dollars spent on investments such as treatment plants. Interviews with Chinese officials lead to an estimation that 60-80% of the pollution and energy reductions came from infrastructure investment, 20-30% by shutdowns, and very little by regulations and monitoring.

Credit: The Guardian

Credit: The Guardian

In many ways, this is a radically different method of environmental rulemaking than in Western societies. American environmental laws focus on regulating pollution, not on promoting investment. They prefer utilizing transparent, market-based mechanisms to change behavior, such as a Carbon Cap & Trade or a tax. Additionally, the American system trusts individual companies and states to “grade” themselves, and allows the people to “score” local leaders through elections.

This is not to say, however, that the Western world itself does not sometimes act similarly. The US Clean Air Act, for example, allows the federal government to impose emissions regimes on states with non-compliant pollution levels. As regulation has stalled, American policy has moved in the direction of incentivizing investment through mechanisms such as feed-in-tariffs, which encourage investment as a proxy for emissions reduction. Even as American laws approach the Chinese model, one should not forget that China’s environmental practices are not perfect and can stand to progress by improving transparency and encouraging citizen involvement.

In addition to his studies on the driving factors for change, Professor Wang examines why the government is deciding to change its practices now. He hypothesizes that China’s leaders view their right to govern as existing within a “performance legitimacy” framework: the government is legitimate if it performs what the citizens want. The American government proceeds under a “process” or “ideology” legitimacy framework, where it claims its right to rule in large part because of the process by which it was selected—democratic election—rather than because of its recent performance. The Chinese government now believes that environmental damage—and the local riots it increasingly causes—is starting to hurt economic growth and damage the public’s perception of its performance.


Professor Wang discusses the issues above in his article, which will be published in the Spring 2012 issue of the Harvard Environmental Law Review. A draft of the article is available on SSRN at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2128167.


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